Last week I got talking with a random guy I met at the dog park, who eagerly offered his advice on Microsoft shares, since they are rolling out new AI tools with their products.
He had just bought a couple of hundred shares, a day before their latest earnings report. He suggested I’d better do the same in this “crazy market“, because, as he put it, “there’s no other way to invest than in what you believe in”.
In the late 1920s, pauper shoeshine boys were dishing out stock tips to customers.
In late ’99, airline attendants were quitting their job to become full-time stock traders.
In 2021, 15-year old smart-phone “traders” were racking up hundreds of thousands of social media followers for their advice on how to trade crypto and meme stocks.
Of course, these stories are completely unrelated by any measure of the imagination, I just thought I’d mention.
But not just the tips and opinions are flying – crappy stocks too. Pretty much any company that recently announced it will be using “AI” to some world-changing end, like helping them to write better emails, is ripping.
Public interest in the mania is off the charts – see below today’s Google Trend graph on search interest for “AI stocks”.
Two days ago, the blank-cheque SPAC SYM exploded up 50% in a single day – and not off the Lows, but from a volatile late-stage digestion post a 500% rally. At the end of last year this thing traded 1M$ a day at a low price tag of $10, and it’s losing more money by the quarter.
But, man … AI ROBOTS!
Collapsed leaders from the past (e.g. PLTR) are now jumping daily by 5-10% or more on frenzy and analyst upgrades.
Yesterday, the old dot-com star American Superconductor (AMSC) gapped 60% in a single day.
The list goes on.
Together with all the regular bragging on social media, and the general disbelieve against bearish opinions expressed, I’d wager we’re closing in on the top.
It doesn’t have to be today – hell, we could be seeing all-time new Highs on NASDAQ and SP500 in a few weeks or by the end of the year. But the signs are not boding well, and the fact that there is so much disbelieve against them is quite concerning.
